The Long Island City real estate market, like many others in the area, is piggybacking off of the success of New York City. All things considered, Long Island City real estate is in a great place. Some experts would even say it is becoming the hottest neighborhood on the market.
“In many ways, Long Island City offers a microcosm of all of the great things that are happening in New York City, as well as some of the challenges that are the inevitable side effects of this success,” said Seth Pinsky, executive vice president at RXR Realty.
The current state of the Long Island City real estate market is directly correlated to a distinct lack of inventory, and rising sales and home prices. As of the second quarter of this year, sales prices increased 4.2 percent, and now represent the highest second-quarter mark since the onset of the recession. The median sales price in the Long Island City housing market now rests around $375,000; which is considerably more than the national average ($236,400). As it turns out, Long Island is a strong seller’s market. Property is in very high demand, which means it should sell for top dollar, even if it is not in the best condition. Sellers receive multiple offers and the price is usually bid up above the seller’s initial asking price.
For as competitive as the market is, renting a place is equally as difficult. Rental property continues to generate a lot of interest and availability is pretty low. Rent prices have not changed over the past three months. This is 18 percent lower than the city average of $4,140 and 29 percent higher than the county average of $2,512. The competitive nature of the rental market should attract those interested in Long Island City real estate investing. Now, more than ever, it should be easy to find tenants for a buy and hold property.
Long Island City real estate, in terms of appreciation, is the norm – rather than the exception. Appreciation was similar throughout the entire county. Nassau County saw its median sales price increase 5.8 percent over the course of just 12 months. Homes in Nassau County now have a median sales price of $439,000. With the exception of the Hamptons and North Fork, Suffolk County sales prices rose 5.8 percent, and are now just shy of $320,000.
Long Island City’s luxury market, however, has seen the largest increases in sales prices. Accordingly, the top 10 percent of all sales outpaced every other market demographic. The median sales price of all luxury homes increased 7.6 percent over the course of four months to $1,075,000. Just to clarify, luxury homes in the Long Island real estate market are those that have sold for $782,500 or more. While it is more niche than mainstream, luxury Long Island real estate investing is in a great place and something that savvy investors should consider.
Listed inventory saw its lowest numbers in 2013 when the amount of homes for sale bottomed out. At that time, there were approximately 12,801 homes for sale in the Long Island City real estate market. Today’s market now boasts 17,066 home listed for sale, down 0.8 percent from the same time last year. Conversely, the second quarter of this year saw more sales close, even though there were fewer homes listed. Nearly halfway though the year, about 5,233 homes had sold, up 5.7 percent on the year. In the face of rising sales and declining inventory, the absorption rate (the number of months to sell all inventory at the current pace of sales) dropped to 9.8 months. No more than a year ago, the local absorption rate was 10.4 percent. Even the luxury market followed a similar trend.
Single-family homes in the Long Island City real estate market now have an average sales price of $494,257; which represents a 1.6 percent increase form the previous quarter ($486,706). Just 12 months ago, single-family sales prices were about $25,000 lower. The number of sales that actually went to close (4,433) increased 22.6 percent from the previous quarter and 4.9 percent over the course of a year. At 113 days, the amount of time homes spent on the market from the previous year remained unchanged
“Monthly contracted, or pending sales activity is 5% higher than last year, and 11.2% higher than in March. Other indicators that support a robust market this Spring are a rise in home-buying and selling interest that can be measured by the number of visitor sessions going to MLSLI.com, the MLS consumer website. In April, we saw a 20% year over year increase in monthly visitor sessions to MLSLI.com and for the first time in recent history, analytics showed over 1 million visitors sessions to site in the month of April,” said Tricia Chirco, MLSLI Marketing and Communication Director.
According to RealtyTrac, the Long Island City real estate market has about 220 homes in some state of foreclosure (default, auction or bank-owned). With 68 homes for sale, and another 266 that recently sold, the number of foreclosures in the Long Island City housing market is relatively high. In fact, foreclosures have increased 100 percent over the course of 12 months. Over the last month, however, foreclosures dropped 60 percent. The decline may be partially attributed to increasing home values.
A majority of the foreclosures in the Long Island City real estate market are in default. More specifically, these homes are simply at risk of falling into foreclosure because homeowners have failed to keep up with mortgage obligations. Otherwise known as pre-foreclosures, defaulting homes make up 75 percent of today’s distressed market. The remaining foreclosures are scheduled for auction. Either scenario should help those interested in Long Island City real estate investing.
The cost of living in Long Island City is about $61,400. At that rate, the cost of living in Long Island City is 0.1 percent higher than the state average. Unemployment, on the other hand, is lower than the state average. Unemployment in the Long Island City housing market is about 5.2 percent, which is lower than the state average (5.5%) and country average (5.4%).
Eric Benaim, founder and president of Modern Spaces, said, “With continued support, the area will soon become a major hub for transportation, business, culture and tourism, joining a burgeoning residential community.” Recent progress serves as a testament to the city, and Long Island City real estate investing is better off because of it.
Long Island City Real Estate Market Summary:
- Current Median Sales Price: $375,000
- Unemployment Rate: 5.2%
- 1-Year Job Growth Rate:
- Population: 394,584
- Median Household Income: $54,195